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Absorptive Capacity and Efficiency: A Comparative Stochastic Frontier Approach Using Sectoral Data

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  • Letizia Montinari

    ()
    (IMT Lucca Institute for Advanced Studies)

  • Michael Rochlitz

    ()
    (IMT Lucca Institute for Advanced Studies)

Abstract

In this paper, we investigate differences in and determinants of technical efficiency across three groups of OECD, Asian and Latin American countries. As technical efficiency determines the capacity with which countries absorb technology produced abroad, these differences are important to understand differences in growth and productivity across countries, especially for developing countries which depend to a large extend on foreign technology. Using a stochastic frontier framework and data for 22 manufacturing sectors for 1996-2005, we find notable differences in technical efficiency between the three country groups we examine. We then investigate the effect of human capital and domestic R&D, proxied by the stock of patents, on technical efficiency. We find that while human capital has always a strongly positive effect on efficiency, an increase in the stock of patents has positive effects on efficiency in high-tech sectors, but negative effects in low-tech sectors.

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File URL: http://eprints.imtlucca.it/1283/1/EIC_WP_4.pdf
File Function: First version, 2012
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Bibliographic Info

Paper provided by IMT Institute for Advanced Studies Lucca in its series Working Papers with number 4/2012.

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Length: 27 pages
Date of creation: Jun 2012
Date of revision: Jun 2012
Handle: RePEc:ial:wpaper:4/2012

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Keywords: absorptive capacity; efficiency; stochastic frontier analysis;

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